Pricing saving by LLU operators causing Ofcom to reassess repair standards
In a move that will save some LLU operators a massive £2.36 per line per year, many fully unbundled lines have been switched from a next day repair level (SML2) to a two day repair level (SML1) and its a change that the public is probably not aware of either. There is a side effect and Ofcom is consulting on changes to the targets it imposes on Openreach to ensure that these changes are monitored and the purchased levels of service are met.
The previous escalating repair and install standards set by Ofcom where only applicable to a limited set of products, and the two day repair option on MPF was not included in these previously, so without changes there was the risk that Openreach could claim it was hitting its targets while ignoring millions of lines.
The Ofcom consultation is interesting in that it notes the downturn in Openreach performance started in 2009, which we think is perhaps understandable as the provider embarked on its commercial roll-out of the GEA-FTTC and GEA-FTTP products at the same time.
At a time when there is lots of money being spent on lobbying over the future of Openreach, it seems a little odd for millions of lines to be quietly downgraded in terms of repair performance while at the same time complaining about the poor performance of Openreach , but such is the pressure on retail pricing and costs for operators that without higher retail prices this was the only option.
Moving forward if Ofcom was to pursue the most frequently called for option of full legal separation and standards were set to ensure much faster install times and fault repair speed there may have to be a big reassessment of what all of us pay per month for our broadband. The other option is that a major switch to FTTP (where operators abroad are claiming things like 50% less faults) could mean less faults, but in a UK where copper cannot be easily retired due to the success of copper based full LLU this looks to be a long complex road even if you ignore the cost of rebuilding the national network.